GM bringing 4G broadband to new vehicles next year with AT&T

A General Motors logo is seen on a vehicle at a GM dealership. (Mike Blake/Reuters)

SOUTHFIELD, Mich. - General Motors, the largest U.S. automaker, said its OnStar unit will begin offering 4G LTE service in vehicles next year in a partnership with AT&T.

The faster mobile data speed will first be available in most 2015 model year vehicles in the United States and Canada, GM said Monday in an e-mailed statement. Additional markets and service providers will be announced in coming months, the company said.

"We're making a global commitment to embed 4G LTE mobile broadband across all of our vehicles," Mary Chan, president of GM's Global Connected Consumer, said in an interview. "This is the largest commercial deployment of 4G LTE services in the auto industry."

The move marks an evolution for GM's OnStar, which has 6 million subscribers in the U.S. and Canada for the in-car communication service. The Detroit-based automaker traditionally emphasized OnStar's operators while other automakers have developed programs that used onboard navigating systems with video screens or systems that piggybacked off of connections with smart phones.

GM's OnStar operator-emphasis strategy is changing with the introduction of new telematic systems in Cadillac and Chevrolet and Monday's announcement.

"This is a big deal," said Thilo Koslowski, an industry analyst with Gartner based in San Jose, Calif. "They want to actually have embedded connectivity in their connected vehicles rather than relying on a mobile phone going forward, that's a pretty big shift in terms of where other vehicle manufacturers are today."

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Long-term evolution, or LTE, is a higher speed, fourth- generation wireless technology compared with third-generation, or 3G. AT&T, Verizon Communications, Sprint Nextel and T-Mobile USA are adding LTE to their networks. LTE allows mobile users to load videos and stream music as much as 10 times faster than 3G, according to the statement.

With 4G, GM said it could include in-vehicle Wi-Fi hot spots, streaming videos and faster application downloads.

"This enables them to actually have the capabilities to support all kinds of innovative services and needs that consumers may evolve or may desire in the future by having this technology available," Koslowski said.

GM didn't disclose pricing details.

"There's going to be different tier levels of service that customers can choose and buy from," Chan said. The faster service won't be available for older vehicles, she said.

AT&T, the second-largest wireless carrier, said the OnStar agreement will boost prospects for the Dallas-based company.

"We think telematics will be a $1 billion business for AT&T," said Glenn Lurie, head of emerging businesses at AT&T Mobility. "Moving forward with GM and OnStar is a big step in that direction."

Tesla has lost about $100 million in sales
and canceled orders due to the Times story, which said the sedan
ran out of battery power sooner than promised during a chilly
winter test drive from Washington D.C. to Boston.

"We have seen a few hundred cancellations that are due to
the NYT piece and slightly lowered demand in the U.S. Northeast
region," Musk told Reuters in an email.

To lose $100 million in car sales, assuming a $100,000
price per vehicle, Tesla would have to sell 1,000 fewer cars
than expected.

Since the Times' Feb. 8 story, by reporter John Broder,
Tesla shares have fallen 13 percent, while the S&P 500 index has
slid 1.4 percent. Between $100 million and $200 million of
Tesla's drop in market value was due to the Times article, Musk
said.

"The Tesla team and I are brainstorming this week how to
correct the misperception that they have created in the market
about how well our car performs in cold weather," he wrote.
"That too, will take money and time."

The Model S is the company's second electric vehicle, after
the two-passenger Roadster sports car. The Model S, which went
into production last June, starts at nearly $60,000 before a
federal tax credit, with stickers ranging to more than $105,000.

Its success is crucial for Tesla, which is looking to turn
an adjusted profit in the first quarter - the company's first
since going public in 2010.

Musk lambasted the Times' review of the Model S, calling the
test a "fake" on Twitter and producing data logs from that
vehicle to disprove the article.

Broder in a Times story dated Feb. 12 denied that he had
faked anything.

Times Public Editor Margaret Sullivan said Broder took
"casual and imprecise notes" of his test drive and did not
exercise good judgment, but noted that vehicle data logs
reproduced by Musk on Tesla's website were "sometimes quite
misleading."

Sullivan concluded that "there is still plenty to argue
about and few conclusions that are unassailable."